Key Takeaways
- The Canadian government is transforming the economy to reduce reliance on a single trade partner and increase resilience to global shocks.
- New measures have been announced to protect and strengthen the steel and lumber industries, including limiting foreign steel imports and imposing tariffs on imported steel-derivative products.
- The government will also provide support to workers and businesses in these industries, including funding for training and financing for companies to maintain and restructure their operations.
- The Buy Canadian Policy will be implemented to prioritize Canadian materials in government projects and federal grants and contributions programs.
- The government has received close to 1,500 applications from companies across various sectors through the Regional Tariff Response Initiative and has already delivered support to many firms.
Introduction to the Changing Global Landscape
The world is changing rapidly, and the United States, the world’s largest economy, is fundamentally reshaping all its trade relationships, causing major disruption and upheaval for Canadians. This shift requires Canada to transform its economy from one that is reliant on a single trade partner to one that is stronger, more self-sufficient, and resilient to global shocks. The Canadian government has recognized the need for urgency and determination in transforming strategic industries, such as steel and lumber, to enable them to adapt, compete, and win in this new global environment.
Protecting and Strengthening the Steel Industry
To protect and strengthen the steel industry, the Canadian government has announced several new measures. These include limiting foreign steel imports to ensure that Canadian steel producers have better access to the domestic market. The tariff rate quota levels for steel products from non-free trade agreement (FTA) partners will be reduced from 50% to 20% of 2024 levels, and for non-CUSMA partners with which Canada has an FTA, the tariff rate quota levels will be reduced from 100% to 75% of 2024 levels. Additionally, a global 25% tariff will be imposed on targeted imported steel-derivative products, such as wind towers, prefabricated buildings, fasteners, and wires.
Supporting the Lumber Industry
To support the lumber industry, the Canadian government will make it easier to build with Canadian steel and lumber. This will be achieved by working with railway companies to cut freight rates for transporting Canadian steel and lumber interprovincially by 50%, beginning in Spring 2026. The Build Canada Homes agency will prioritize shovel-ready, multi-year projects that can begin within 12 months and use Canadian wood products. With a funding allocation of roughly $700 million next year, Build Canada Homes will create $70 to $140 million of new demand for Canadian wood products and attract private and provincial capital to multiply its impact.
Increasing Protections for Workers and Businesses
The Canadian government will also increase protections for workers and businesses in the steel and lumber industries. This includes earmarking more than $100 million over two years to provide support to eligible employers in all sectors with an active Work-Sharing agreement and who commit to supporting training for employees working reduced hours. The government will also provide an additional $500 million to the Business Development Bank of Canada (BDC) Softwood Lumber Guarantee Program to support softwood lumber firms facing liquidity pressures. A single window to applications will be established to help companies navigate the suite of support programs, and a Canadian Forest Sector Transformation Task Force will be launched to examine and report on how the forest industry can maintain its competitiveness over the long-term.
Quotes and Statements
Several government officials have made statements emphasizing the importance of the steel and lumber industries to Canada’s competitiveness and the need to support these industries during this period of uncertainty. They have highlighted the government’s commitment to protecting good jobs, strengthening communities, and reinforcing Canada’s made-in-Canada industrial capacity. The officials have also emphasized the importance of building a stronger, more resilient economy by standing behind the steel and softwood lumber industries and ensuring that companies have the tools and financing they need to keep operating, growing, and strengthening supply chains.
Conclusion and Next Steps
In conclusion, the Canadian government is taking urgent and determined action to transform the economy and support the steel and lumber industries. The new measures announced will help protect and strengthen these industries, increase protections for workers and businesses, and prioritize Canadian materials in government projects and federal grants and contributions programs. As the government continues to implement these measures, it is expected that the steel and lumber industries will become more competitive, and the Canadian economy will become stronger and more resilient to global shocks. The government will continue to work with provinces, territories, and industry stakeholders to ensure that the forest industry can maintain its competitiveness over the long-term and that the economy is well-positioned for long-term growth and competitiveness.